Mobaraka Mohammadi said he works 12 hours a day just to earn money and pay his mortgage.
Ms Mohammadi, 23, from Adelaide’s north, told the ABC she may have to stop university to get more hours if her mortgage payments and living costs rise further. .
“I was actually trying to cut some hours so I could focus on my studies but… if I cut some hours, I wouldn’t be able to pay my mortgage,” he said. .
His house cost him $390,000 and the mortgage repayments were $750 a month.
But amid the latest interest rate hike, Ms Mohammadi’s repayments jumped to $940.
“If there will be more interest than this, (it means) I have to leave my study and I thought about it because I can’t underestimate full-time studies and full-time work.”
The rising cost of food and other expenses has increased his situation and forced him to share money for the first time.
“I’ve never had that problem… but now I’m doing my budget, every week (when) I get my pay slip As it is good, this amount goes to the home loan, then it goes to the bills. , and $50 will go toward my gas.”
He has reduced contact with online shopping to help find savings.
Australia must make ‘tough calls’
The Reserve Bank of Australia (RBA) Cash added 25 basis points last month and settled at 3.1 percent..
Mortgage broker Gracious Chidhakwa told the ABC that some families are starting to miss their repayments, and he warned that the full impact of the price increase will not be felt for some time.
“Now we see some who have missed their repayments, some who come back to us and say, ‘look, we can repay quickly’, or some who have to sell because they can’t. then this land can afford again,” Ms. Chidhakwa said.
He said low rents combined with high interest rates have forced rents to rise as landlords pass on the increase. of interest to tenants.
“Those who want mortgages, some have to sell, some have to downsize, some have to make those tough calls,” Ms Chidhakwa said.
“Some have had to make some big cuts, (or) stop their children from going to private schools, put their children back in public schools because of the cost of maintenance.
Ali Kawser, mortgage broker and manager of AK Home Loans in Melbourne’s west, told the ABC that some prospective home owners who foreclosed on their homes and properties last year did not want to continue.
“Many of them are first time home buyers, they are not investors right now because they don’t have mortgage concerns but the high cost of living.” they are now… because of this, they are not yet in the market, or few are available. in,” said Mr Kawser.
“They don’t know the future… no matter what they plan… they all come undone,” he said.
“Twelve months ago we told them everything is fine, yes you can borrow a lot and everything will be fine, we are happy, but 12 months later we I apologize to them.”
Procedure for the conclusion of a formula
David Lin is anxiously watching Australia’s mortgage rate rise and wondering if he will have to go back to work any time soon.
Mr Lin, a Melburnian in his 30s, died Fixed mortgages before bankruptcy but it will expire next year, which means that if the price stays the way it is, he could be forced to pay an extra $300 to $400 every month.
“It’s affordable. (But) the increase in mortgages is more difficult for a single person,” said Mr Lin, who works in e-commerce.
“A lot of (unnecessary) spending should be abandoned.”
As mortgage payments mount, Mr. Lin is also feeling the pressure of other living costs.
“It’s very noticeable, it was $20 the first time to take it, but now it’s like $30,” he said.
“I should have cooked a lot for myself, but when I went to the market, I realized that food is more expensive than before.
“The money is running out fast”.
Although Mr. Lim expects his salary to increase, he is worried that it will not be enough and may consider taking another job.
“Now I’m thinking about doing some special work this weekend,” he said.
“I never thought about expenses before, now I have to plan.”
What you can do to manage mortgage stress
The founder and chief executive of Financially Empowered, Grace Mugabe, says the cost of living crisis and rising interest rates are affecting many people, especially culturally and linguistically diverse (CALD) Australians and immigrants.
Ms Mugabe, who helps migrants and multicultural Australians manage their finances, told the ABC that some families had the added pressure of sending money home to their country of origin.
“Now when things happen here, it means that a lot of money needs to be spent, for living, but unfortunately, they also need to support their families abroad. ,” said the woman.
He said some would-be homebuyers relied on assurances that interest rates would not rise until 2024, and are now struggling.
“A lot of people from the CALD community are looking for financial advisors,” he said.
Experts say up to 80 per cent of households in some of Melbourne’s multicultural post offices were struggling financially in the middle of last year – before the cash price reached its current mark.
Ms Mugabe said she has recently seen an increase in the number of people attending her financial training.
For people with financial problems, Ms Mugabe said apart from contacting your bank, Financial Counseling Australia and MoneySmart.gov.au offered valuable advice for people who want to optimize their budget.
“But there are many other things that need to be done in translating these information from English to different languages,” he said.
For people who are suffering from the crisis of rent, Ms Mugabe recommended another person to share the house and split the cost.
According to Ms Chidhakwa, families who are struggling to meet their mortgage should talk to their mortgage broker now, so they can revisit the loan and look at smaller lenders and better deals. available.
He said that mortgage holders should try to ensure that they do not miss repayments, as this may affect their ability to borrow money in the future.